Dumpsters will often catch my attention 🙂 I wonder how many building owners who are paying for TI’s / Upfits in a building like this capitalize the improvements rather than expensing them? I don’t know anything in particular about this specific building. I don’t know what the upfit costs will be but it was stripped to the studs. Let’s say it’s $50-$75k to renovate this space? Would you capitalize it? Expense it? Let’s assume the owner has had this building in-service for at least one tax year. Since this is one of 4 units in this building, we would think expensing those improvements utlizing the Tangible Property Regulations would be the way to go.
If you happen to have a building where you think you may have capitalize improvements / TIs where perhaps they could have been expensed, feel free to reach out. We can help you figure that out at no cost. If it turns out you can and should do a capitalization to expense reversal you might be able to do it on your own…if you need our help, I would get you an estimate. BTW, these typically are absolutely monster tax savings or the owner 🙂